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Friday, October 7, 2022
Jomo Kwame Sundaram was United Nations Assistant Secretary-General for Economic Development and received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.
KUALA LUMPUR, Oct 13 2016 (IPS) - The Trans-Pacific Partnership (TPP) agreement between the US and eleven other Pacific Rim countries was under negotiation for the first seven years of the Obama presidency. For the first four years, Hilary Clinton was the Secretary of State, directly supervising the negotiations. Even after she quit her cabinet position to launch for her second presidential bid, she continued to tout it in superlative terms.
While largely in the interests of corporate America, the TPP is not in the interests of the US economy or the public at large. While it is in the interest of US transnational corporations (TNCs) to source manufactures and services from low-wage Asian economies for the US market, by doing so, they are likely to displace those previously producing those goods, increasing US unemployment. This, in turn, reduces aggregate demand and increases the current account deficit in the US balance of payments.
US corporate interests
The TPP will promote US corporate interests by institutionalizing new arrangements which undermine the sovereignty of TPP countries, including the US itself. For instance, the TPPA’s patent and copyright provisions are stronger and for longer durations. This would strengthen corporate monopolies, especially of US TNCs, raising the prices of goods, especially pharmaceutical drugs, in all TPP countries. Thus, while US TNCs stand to profit greatly, consumers in all TPP countries, including the US, would be worse off.
The TPP’s investor-state dispute settlement (ISDS) provisions will mean that foreign investors can sue TPP governments more easily in special tribunals. Such disputes will not be settled by national judiciaries or in accordance with host country laws. Thus, private corporations will be less subject to the national laws and governments of the countries where they invest; even US laws would be less binding on all TNCs.
Despite being a nation-state itself, the US is setting up supranational institutions that would serve TNCs, when needed, while not being subject to them, when convenient. Thus, the White House appears to be standing with big business against its own national economic interests, especially of its own working class, referred to as its middle class in better times.
But elections offer a rare opportunity for the public to have their voice heard. The November US elections are particularly interesting as its economy is not popularly perceived to have recovered although it has done better than most other advanced countries. Wooing working class support is crucial for both presidential candidates.
As in Europe, Donald Trump, whose narcissism is undermining his own chances, has successfully directed workers’ anger over their lot against ‘others’, i.e. Muslims, Mexicans, immigrants, minorities and Asian workers accused of having ‘stolen American jobs’.
Despite having negotiated the TPP, Hilary Clinton also professes opposition to it while allowing it to stay as part of the Democratic Party platform for the election. This is reminiscent of Bill Clinton’s earlier opposition to the North American Free Trade Area (NAFTA), negotiated by President George H. W. Bush, before becoming its great proponent after winning the White House. To legitimize her own volte-face, she may try to add new TPPA provisions banning ‘currency manipulation’ while making it clear that the real intended target is China.
Meanwhile, the outgoing Obama administration has successfully put together a bipartisan lobby, including establishment Republicans upset at Trump’s nomination, to get the TPP accepted by the US Congress during the ‘lame duck’ period right after the early November elections before the Christmas recess. Already, these efforts have met with early success.
US national security
Recognizing the lack of credibility of earlier claims that the TPP would benefit the US economy and American workers, the Obama strategy has portrayed the TPP as necessary for ‘security’ to check the rise of China. Several TPP country leaders have expressed this concern while the White House has put growing pressure on the US Congress to this effect.
The Obama administration now contends that if the US pulls out of the TPP now, it will lose credibility as a ‘security partner’. Other TPP countries might then conclude that if the US could withdraw from the TPP despite having framed it, its other pledges would no longer be credible. The next US President will thus find it difficult to withdraw from the TPP at the risk of being accused of jeopardizing US ‘national security’.
Americans, and Europeans for that matter, are increasingly convinced that while elite interests are well served by ‘globalization’, the public interests of consumers and working people are not. The strong American popular opposition to the TPP, the Brexit vote and other recent developments in the West suggest growing rejection of the myth that national public and corporate elite interests are identical.
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